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Yesterday, Japanese telecom giant Softbank announced it was buying a 70 percent stake in Sprint Nextel. While Sprint investors seem to be excited about the deal—since it was confirmed last week, Sprint’s stock has risen 14 percent—SoftBank shares have moved the other way. Since Softbank confirmed the merger talks, its stock price fell 17 percent in a single day, the largest single drop since the company was listed on Japanese markets in 1994.

“He’s a very calculating strategist with a knack to see what the next big thing is,” said Ulrike Schaede, a professor of Japanese business at the University of California, San Diego. “Every time he does a big bet like this, like with Vodafone, the stock price of SoftBank plummets and everyone says he’s gone crazy and six months later people say, ‘Wow, he’s got a plan.’”

Under Son's leadership, SoftBank brought the iPhone to Japan and increased its own annual net income by seven-fold over the last four years. But he has also lost huge amounts along the way. For instance, SoftBank acquired Vodafone KK, the company’s Japanese unit, for $15.1 billion in 2006—a move that the company has yet to fully recover from. Bloomberg reports that on March 3, 2006, the day the company confirmed those talks, SoftBank was worth 3.49 trillion yen ($44.33 billion); today, it is worth just 2.65 trillion yen ($33.67 billion).

“He’s not an establishment player,” Steve Vogel, a professor of political science and the chair of the Center of Japanese Studies at the University of California, Berkeley, told Ars. “He’s a very aggressive, risk-taking, entrepreneurial person. He’s been colossally successful and had some colossal failures. But overall he’s made an impact on Japan—he’s the closest thing to Bill Gates in Japan.”

From Japan to California and back

Many have attributed some of Son’s success to his unusual childhood. First, his original birth name was Son Jeong-ui, a Korean name. His family is Zainichi Korean, or Koreans who have “temporarily” settled in Japan, even if they’ve lived there for decades or more—historically, many have faced discrimination and have had a hard time being fully accepted into Japanese society. (Son is a third-generation Zainichi Korean.) As a child, the family adopted the Japanese name Yasumoto as a way to fit in.

As a teenager, he was fascinated with business and entrepreneurship. He reportedly pursued a meeting with Japan McDonald’s president Den Fujita, who, upon meeting the young go-getter, advised him to study English and computer science.

In 1973, at the age of 16, Son was sent to California to live with family and friends, and most importantly, to learn English. He attended Serramonte High School in Daly City, just south of San Francisco, and by 1975 entered Holy Names College in nearby Oakland. Two years later, he transferred to the University of California, Berkeley as an economics major. While he graduated in 1980, those who knew him said that Son, who was then known by his Korean name, spent much of his time making money rather than being in class.

While an undergraduate student at UC Berkeley, Son imported early consoles of Pac-Man and Space Invaders and leased them to local bars and restaurants in Northern California, notably Yoshi’s, a well-known music venue which began as a north Berkeley restaurant but now exists as a larger jazz club in downtown Oakland. Back in Japan, Son’s father ran a pachinko parlor (pachinko is a style of Japanese pinball) and had access to early arcade units. Son reportedly made his first million dollars through these arcade games.

But Son’s big break was partnering with Forrest Mozer, who invented and patented the first speech synthesizer in 1974 and was (and still is) a physics professor at UC Berkeley.

“I told my wife the day I met him, ‘That guy was going to own Japan one day,’ and I didn’t realize how true that was,” Mozer told Ars, describing Son when he first met him as “well-dressed, modest and conservative,” eschewing the popular local styles of the day, such as long hair, tattoos, and piercings.

Son had read about Mozer’s invention, and despite not knowing anything about electrical engineering, he had a keen sense for how the technology could be used.

“He had an idea for a translator that would pronounce the word that you were trying to translate and came to ask me if I could help him build a prototype,” Mozer added. “There were a lot of people talking about translators at that time. The beauty of his idea was not to create a translator, but to sell it. His plan was to set up kiosks in airports, so you can rent it and could say hello and other words in that language. He didn’t know any electronics, but it was clear from the very beginning that he was an entrepreneurial genius.”

That device, a pocket-sized electronic dictionary, eventually was sold in 1979 to Sharp Electronics for $423,000, which would be worth over a million dollars today.

While Mozer doesn’t keep in regular contact with Son—the two last saw each other at Yoshi’s in 2009—he has immense respect for the Japanese entrepreneur, and has been interviewed many times by Japanese media about Son.

“I used to try to get him to donate to the Physics Department, but I was never successful at that,” Mozer added with a laugh. “At one point [Son] said he owes me. And I said, 'If you owe me, there’s a way to pay me!’”

Enlarge/ Son helped transform SoftBank from a small software company into a mobile phone powerhouse.

Japan's "local hero"

Upon graduating from UC Berkeley in 1980, Son returned to Japan, founding SoftBank as a PC software distributor the following year. By the late 1980s, as Bloomberg reported, he created a system that let people across Japan choose telephone operators with the lowest rates for domestic and long-distance calls—a thorn in the side of the newly privatized Nippon Telegraph and Telephone (NTT), Japan’s historic telecom monopoly.

By 1994, he helped Cisco tackle the Japanese router market by convincing 14 companies to partner to form Nihon Cisco. That same year, SoftBank went public—and as SoftBank’s largest shareholder, Son profited nicely from it, spending his money on real estate, notably his own “technomansion.” Son told Wired that his home golf range can mimic a Pebble Beach fog, and he impressed Bill Gates when Gates visited once.

In 1996, Son founded Yahoo Japan as a joint venture with Yahoo; today he is its largest shareholder, according to a profile in the New York Times in 2010. Son originally invested $374 million between 1995 and 1998, which at its peak value was worth 50 times that, reported Wired in 2004.

Son forcefully argued that Yahoo could have had more success if it allowed its international subsidiaries to be more locally run, which is how Yahoo Japan is—and it remains the largest search engine in the country.

“You need a local hero,” he told the Times, adding that Yahoo’s expansion strategy had been like saying, “You’re the only smart guy and those slaves in the poor counties are dumb guys.” He added, “If they had listened to me and had equal partnerships in China, the UK, Germany, and Brazil, maybe Yahoo in those countries could have become positioned like Yahoo Japan.”

By the peak of the dotcom boom at the end of the 1990s, when SoftBank was worth $180 billion, Son was reported to be worth $78 billion—a number that dropped by more than $70 billion in the crash. It was supposedly the largest financial loss by any one person ever. SoftBank’s stock price in 2000 was 198,000 yen, which fell to 1,542 yen two years later. As Wired noted back in 2004, “SoftBank blew billions more on Asahi TV, Asia Global Crossing, SKY Perfect, and a throng of dotcom dogs: Kozmo.com, More.com, SportsBrain. Webvan? Yep, that was him.”

At the time of that 2004 profile, SoftBank was building a gigabit Ethernet network across Japan and leasing NTT’s old copper wire. The result was Yahoo BB, which at the time offered 12Mbps to Japanese residents for $21 per month.

“He’s much more powerful [than other Japanese CEOs]," added Vogel, the Berkeley professor. “Normally in a Japanese firm the executive [makes decisions by consensus]. Son would be much more easily understood as an American. He’s an entrepreneur, has a vision, and makes it happen—definitely much more of a risk-taker.”

Post-disaster relief

More recently, Son has guided SoftBank to invest in solar energy, which has been on the rise in Japan in the wake of the 2011 earthquake in northern Japan that damaged the Fukushima Dai-ichi nuclear power plant.

In a clever business move, Son also promised that for one year, SoftBank would cover the living costs for 1,200 residents of Tamura, one of the cities most hit by the nuclear disaster. The company, he added, would also help them relocate to Takeo, a city in Saga prefecture, where Son grew up. In another post-disaster idea that originated on Twitter, Son said that all those who were left orphaned as a result of the earthquake would receive free phones and would have their costs paid for by the company until the age of 18. He also decided that all iPhone owners in the region would receive new ones if their phones had been lost or damaged.

In the United States, experts hope that Son’s business acumen can be not just a boon for Sprint, but for the entire wireless industry.

“What we know from what happened in Japan is that when he entered the [mobile market], NTT got so much better for it,” said Schaede, the UC San Diego professor. “It was a major wakeup call for NTT. They just had to compete and so they gave more power to DoCoMo [NTT’s mobile wing].”

The bottom line? “I think he’s going to give AT&T and Verizon a run for their money,” Schaede said.

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Cyrus Farivar
Cyrus is a Senior Tech Policy Reporter at Ars Technica, and is also a radio producer and author. His latest book, Habeas Data, about the legal cases over the last 50 years that have had an outsized impact on surveillance and privacy law in America, is out now from Melville House. He is based in Oakland, California. Emailcyrus.farivar@arstechnica.com//Twitter@cfarivar

As a Sprint customer, I am very curious how this will turn out. Sprint has been seriously lagging behind for awhile now. Let's see LTE roll out quickly and if Sprint can have decent LTE and be the oinly company offering non-grandfathered unlimited data plans still, they will do much better

The real question is what is a storm trooper doing at an iPhone launch?

The key to selling products is to un-productize it; make the market see it as more than just a product. The fact that iPhones are white and Stormtroopers are white clearly indicates that there are are marketing synergies that can be exploited to enhance the visibility of our offering and target with laser focus our goal of transforming it from a mere product into an experience that taps into the popular cultural zeitgiest. /MBA

The real question is what is a storm trooper doing at an iPhone launch?

Destroying Droids. Duh.

What? With their legendary aim? Storm Troopers are only slightly more accurate than iOS Maps.

LOL.

...

On that note, I'm also interested in seeing how T-Mo reacts to this. I do like their openness and ability to respond (micro-SIM for unlocked iPhone 5s, etc) .. while Sprint has been hemhoragging (their network has been horrible, I'm jumping ship ASAP).

I met Masayoshi Son in 1994, shortly after he acquired Ziff-Davis, which in turn owned Interop. He came to our headquarters and a gave a short speech. It was clear that he was determined to show the Japanese that he was a better businessman than they were. He came across as very intelligent, but not arrogant, and willing to try anything, as long as a good business case could be presented. Were the opportunity to arise, I would certainly work for him again.

The thing about Japanese business executives is that they refuse to take risks, unlike the rest of the world. I've known some business meetings deciding on how to proceed to take an entire day to make one simple decision. We need more people like Mr. Son to give the wireless industry a swift kick in the ass.

I really hope he can show everyone up with a successfull wireless company that doesn't abuse it's customers for profits. Otherwise I just don't need a smartphone if I have to worry or even wonder about overages at all.

Somewhat off topic but just moving to supporting another OS isn't going to justify you making more money. Improve your skills or, if they're already sufficient, get out there and find that job. You can do it!

This is interesting. I was on the verge of using Sprint for my new iPhone but after discovering there was no LTE coverage in Phoenix, Verizon got my two year contract. You want to sell top of the line smart phones, you need to support all their features!

This is interesting. I was on the verge of using Sprint for my new iPhone but after discovering there was no LTE coverage in Phoenix, Verizon got my two year contract. You want to sell top of the line smart phones, you need to support all their features!

That's because Sprint is in the process of rolling out their LTE service. The expect to be done by the end of next year. There said in early September (I think) were adding 100 new cities by the end of this year and 22 of them went last week. Phoenix is not on this year's list, but I did find some posts talking about how deployment in several areas like Eastern Kentucky that weren't supposed to start rollout until next year are already underway a few months early. So here is to hoping that they cotinue early rollouts and they get ramped up quickly.

Yes, I realize that doesn't help you in Phoenix at all, just saying that they are getting there.

“He’s a very aggressive, risk-taking, entrepreneurial person. He’s been colossally successful and had some colossal failures. But overall he’s made an impact on Japan—he’s the closest thing to Bill Gates in Japan.”

Very US living comment. Just like they were no success business man before Bill Gates and how to always link something from other countries to the US...

This and the T-Mobile announcements give me hope that I can jump ship from Verizon in the near future and get affordable celluar service. I can only hope that other long time Verizon-ers jump ship such that it finally starts to pull down the ridiculous prices.

“He’s a very aggressive, risk-taking, entrepreneurial person. He’s been colossally successful and had some colossal failures. But overall he’s made an impact on Japan—he’s the closest thing to Bill Gates in Japan.”

Very US living comment. Just like they were no success business man before Bill Gates and how to always link something from other countries to the US...

He is a very successful japanese businessman *DOT*

"He's the closest thing to Bill Gates in Japan" conveys more information than "he is a very successful Japanese businessman". People (American or not) are familiar with Bill Gates, so it helps the explanation by giving a point of reference. It isn't jingoistic to compare a lesser known person to a very famous person that happens to be from your country.

“He’s a very aggressive, risk-taking, entrepreneurial person. He’s been colossally successful and had some colossal failures. But overall he’s made an impact on Japan—he’s the closest thing to Bill Gates in Japan.”

Very US living comment. Just like they were no success business man before Bill Gates and how to always link something from other countries to the US...

He is a very successful japanese businessman *DOT*

Quote:

Many have attributed some of Son’s success to his unusual childhood. First, his original birth name was Son Jeong-ui, a Korean name. His family is Zainichi Korean, or Koreans who have “temporarily” settled in Japan, even if they’ve lived there for decades or more—historically, many have faced discrimination and have had a hard time being fully accepted into Japanese society. (Son is a third-generation Zainichi Korean.) As a child, the family adopted the Japanese name Yasumoto as a way to fit in.

I suspect if he had failed then the sentence would have been, he's an unsuccessful Korean businessman.

At the time of that 2004 profile, SoftBank was building a gigabit Ethernet network across Japan and leasing NTT’s old copper wire. The result was Yahoo BB, which at the time offered 12Mbps to Japanese residents for $21 per month.